Amidst all the hype centering the US budget deficit, there’s little that you’d find in common except the word ‘budget’ when you try to compare it with that of household budget.

US budget - The macro-economy’s recent performance

According to the data sourced from the Associated Press, the government has said that the budgetary deficit for 2013 in overall amounted to $680.3 billion dollar. This is quite low as compared to $1.09 trillion in 2012 and so, it is considered to be the smallest difference since 2008, at a time when the government was grappling with a deficit of $458.6 billion.

Basically, budgetary deficit refers to the difference in what the government earns as a way of tax revenue and how much it spends. Hence, the deficit has narrowed this year that culminated on 30th September. This is solely because revenue improved while expenditures dropped.

As per the news reported by NPR.org’s Tamara Keith direct from the White House, a stronger revenue as well as the tax changes brought upon as part of the fiscal cliff deal have helped into to collect higher amount of taxes.

Moreover, the savings generated as a result of those automatic across-the-board spending cuts called as the sequester, reduction in the number of people living off the food stamps and the downsizing of the US army’s active troops in Afghanistan, amongst other factors have helped the government to achieve such a feat.

Household budget - The groundwork for better debt management

Speaking about the differences amongst the two kinds of budget - the US budget and household budget. The most prominent fact of them all is that you can’t print dollars or float bonds in the market with such a paltry amount seed capital at your disposal.

Moreover, you don’t have a PhD in economics from MIT as our Fed Chairman Ben Bernanke does. Therefore, counting out of the idea of dealing with such complex fiscal policies of the nation that are beyond any layman’s control, you can very well control your own household budget.

First of all, you can cut back on some excessive credit card use too or build up an emergency fund to steer clear of digging yourself further into debt or even have your debts bundled into a single monthly payment obligation, the way it is usually done in a consumer debt management plan. These are some of the basic principles of debt management, which the Obama administration did apply as far as their fiscal policies are concerned to enable the feeble US economy to standback on its feet.

Debt management plan - What is its basic structure?

When it comes to debt management, then fiscal discipline is of utmost importance, lacking in which would ruin the whole idea of it. In that case, you’d have to start off with a plan, to serve as your foundation. Here, you’ll have to begin by taking an unbiased look at your current financial state.

For that purpose, you may study your personal balance sheet and find out whether or not your assets are worth more than your debt obligations. If results show that you have a negative net worth, then it is for you to locate the causes behind that.

Considering that your negative net worth is because of student loans, auto loans or mortgages, therefore, in such a scenario, you’ll have to avoid incurring any fresh debt. Make every transaction a cash-based one, until you’re back on a sound financial footing.

In addition, you’ll have to prioritize your debt payments and so, it would be best to pay off the debt that attracts the highest rate of interest. Luckily, you won’t have pass a resolution or win a consensus to manage your household budget, before you end up breaking your bank and are forced to file for bankruptcy protection, just like Detroit.

Debt management and the U.S economy

The outcome is for all to see. The smarter the sequestration is (automatic spending cuts), the better off would be the US economy, monetarily. Here are some of the highlights of a report published by the Office of Management and Budget that reveals the breakdown of revenue sources as well as outlays for the fiscal year 2013:

As per the Mid- Session Review (MSR) estimate, corporation income taxes were lower by $5.2 billion to come down at $273.5 billion.

The MSR estimate also reveals that income taxes were up by $6.7 billion to be recorded at $1.316 trillion.

An outlay of about $886.3 billion has been decided to be spent on human welfare schemes by the Department of Health and Human Services.

Another outlay of $607.8 billion has been earmarked for the Department of Defense.

Finally, the Obama Administration has to come up with a well-balanced debt management plan to nurse the ailing US economy and to defend the American Dream from going kaput. As reported, the Federal Reserve has said that it’ll continue to follow the current path and would not shrink its bond-buying program, while it expects from the US economy to throw up some positive sign - a sign that will imply it is marching forward.

Lorena is a financial content writer. she has contributed huge articles to various finance websites. She is working with Oak View Law Group (Ovlg) communities. It’s a law firm and dedicated to relieve the financial stress of peoples. To get more related information please visit http://www.facebook.com/OVLGroup.